The danger of borrowing more money to pay off old loans, however, is that you can start charging again on the credit cards that are now paid in full.
What is meant by the phrase consolidating credit card debt
Both put the control in your hands, which can be good or bad, depending on how disciplined you are.
Remember, you’ll need to not only put together a budget, but stick to it as well.
The lender will pay off your credit card bills, and in exchange you’ll enter into a loan agreement with the lender to pay back the money.
For a credit card consolidation loan to be worth your while, you’ll want a plan that offers a lower interest rate and/or lower monthly payments than you’re currently paying to your creditors.
The ideal time to get into a consolidation loan is when rates are low.
However, even as rates increase you should still be able to qualify at a good credit with a good credit score.
However, this only works as an effective debt solution if you meet three key criteria.
This is the number one factor in determining how effective you can be with this debt solution.
In order to qualify for the interest rate you need on the consolidation loan, you need a high credit score.
Otherwise, you either won’t get approved for the loan or the rate will be too high to provide the benefit you need.
You’ll need a good to excellent credit score — above 690 — to qualify for most cards.